SFX Entertainment Buys Beatport

Posted on Feb 27, 2013

SFX Entertainment has agreed in principle to purchase Beatport, the leading dance music download site. Led by the media executive Robert F. X. Sillerman, the purchase is part of his strategy to build a $1 billion empire focused on electronic dance music (EDM).

The price has not been made public, but the figure that has been batted around is close to $50 million.
Beatport, founded in Denver in 2004 by Jonas Tempel, has become THE download store for electronic dance music, despite having one of the worst search features available. With a catalog of more than one million tracks, it claims to have 40 million registered users.

“Beatport gives us direct contact with the D.J.’s and lets us see what’s popular and what’s not,” Mr. Sillerman said in an interview. “Most important, it gives us a massive platform for everything related to E.D.M.”

Since the company was revived last year, SFX has focused mostly on live events, with the promoters Disco Donnie Presents and Life in Color; recently it also invested in a string of nightclubs in Miami and formed a joint venture with ID&T, the European company behind festivals like Sensation, to put on its events in North America.

In the 1990s, Mr. Sillerman spent $1.2 billion creating a nationwide network of concert promoters under the name SFX, which he sold to Clear Channel Entertainment in 2000 for $4.4 billion. Matthew Adell, Beatport’s chief executive, said that being part of SFX could help the company extend its business into live events, and also into countries where the dance genre is exploding, like India and Brazil.

“We already are by far the largest online destination of qualified fans and talent in the market,” Mr. Adell said, “and we can continue to grow that.”

The Future: $50 million is certainly a lot of money to pay for a concern that’s going to be nothing more than a barometer of what’s trending. Although Beatport has many solid features, the manner of which genres are broken down and the pathetic search facility is a serious hinderance. Furthermore, the company has not leveraged social media in any significant way into the site, which would certainly help in terms of providing much-needed song descriptions and ratings.